Flipkart will soon come in a big problem

Companies have been releasing such statements since last year if I remember correctly. If someone with a degree in finance can clarify this - Flipkart cannot buy from the grey market since the transaction for a consumer is completely white. As a consumer you pay VAT and any applicable taxes.

The article says, "Sony India was also miffed at the huge discounts being offered online when compared to prices at the bricks-and-mortar showrooms, which still account for over 90% of overall sales." If only 10% sales come from online, why do they care about the brick and mortar store sales being affected?

"We want to know what the modus operandi is and how are they able to sell below the cost price." - This is the reason why Flipkart recorded losses of nearly 1300 crores last year; they take a hit on the price difference between actual price vs discounted price. It's basic cost of acquisition.

I don't think any company can refuse to honor warranties for a product sourced legally. They would open themselves up to consumer lawsuits.
 
These companies should thank such websites which drives their sales in numbers. There are lot of impulse buyers also out there who buy online and contribute to their sales. Sab line pe aa jaayenge.
 
Blackend said:
I don't think any company can refuse to honor warranties for a product sourced legally. They would open themselves up to consumer lawsuits.
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That is only when its sold through resellers authorized by the company. If Flipkart/seller is not authorized to be a reseller for a product in the first place, the product has same status as a gray market import and the company has no need to honor warranty. Paying VAT does not automatically make you entitled to warranty. If the seller is authorized when the product was sold, then they cannot void warranty even if the seller is no longer authorized.
 
Lord Nemesis said:
That is only when its sold through resellers authorized by the company. If Flipkart/seller is not authorized to be a reseller for a product in the first place, the product has same status as a gray market import and the company has no need to honor warranty. Paying VAT does not automatically make you entitled to warranty. If the seller is authorized when the product was sold, then they cannot void warranty even if the seller is no longer authorized.
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Is there any place online where I can get the details of consumer law of India?

I seriously doubt that the small brick and mortar stores which sell a few mobile phones(e.g recharge shops) apply to each and every company for being their authorised retailer. Same goes for the small shops selling computer components like motherboard, proccy, ram, router, pen drive, monitor, headphone, usb hub etc.

As far as I know, the products sold in the grey market are imported illegally bypassing VAT and customs. And when these guys sell it, they do not give bill and hence bypass VAT again.
Whereas WSRetail buys products directly from companies and resellers and pays VAT for it. And when it sells the product to consumer, pays the VAT again.
 
Sony is in deep trouble already, last thing they want is 10% of their own product being price matched at retail. That other 90% will have to lower their prices as well by some percent.

Also it is not clear whether Sony distributes its SKUs on consignment model. Meaning whether the payments are done upfront before the sale is made by the retailer or only after the sale is made.

Shipped product v Sold product.
 
Minister Nirmala Sitharam said, "We have received many inputs regarding Flipkart episode. Lot of concern have been expressed and we will look into it". He continued, "Now there are many complaints. We will study the matter... Whether there is a need for a separate policy or some kind of clarification is needed, we will make it clear soon."



If evidence proves that Flipkart is using unfair business practices, it may have to pay a penalty three-times the amount that the company received as foreign investments. It is said that Flipkart a foreign investment of up to US$180 million.



Read more at http://www.tweaktown.com/news/40466...rt-over-big-billion-day-complaints/index.html
 
hotshot05 said:
Is there any place online where I can get the details of consumer law of India?

I seriously doubt that the small brick and mortar stores which sell a few mobile phones(e.g recharge shops) apply to each and every company for being their authorised retailer. Same goes for the small shops selling computer components like motherboard, proccy, ram, router, pen drive, monitor, headphone, usb hub etc.

As far as I know, the products sold in the grey market are imported illegally bypassing VAT and customs. And when these guys sell it, they do not give bill and hence bypass VAT again.
Whereas WSRetail buys products directly from companies and resellers and pays VAT for it. And when it sells the product to consumer, pays the VAT again.
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In those cases where the items are resold by unauthorized resellers, warranty is completely at the discretion of the manufacturer. Some outright deny warranty when they don't see a proof of purchase from an authorized source and others don't. In case of some manufacturers who track their authorized sales, the warranty is counted from the day the purchase was made from a authorized source. For example, if a small scale reseller buys a product with 1 year warranty from a authorized source and resells it after 3 months, the final buyer would only have 9 months warranty.

As for grey market products, not all grey market products are illegally brought into the country. Parallel imports are often done in a perfectly legit manner. In India it is legal to sell parallel imports as clarified through a court judgement. However the manufacturer has no liability towards those purchases. They don't have to honour warranty and they don't need to provide repair services.

Some companies like Sony offer repairs on parallel imports at penalized charges, the standard charges for repairing parallel imports are twice or 3 times of what it would take to repair the same item when its bought in India and out of warranty.
 
hotshot05 said:
And how are we supposed to know which shop is authorized by which company?
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Quite so. Check this out. As on July 6th 2014, Sony apparently listed FK (read WS Retail) as an "authorized" online seller -

http://web.archive.org/web/20140706....co.in/section/shop?hpid=wheretobuy:home:RBAN

After the latest FK fiasco, they seem to have removed WS Retail from their authorized seller list -

http://www.sony.co.in/section/shop?hpid=wheretobuy:home:RBAN

How the heck are users supposed to keep track of this nonsense?!

Its not just Sony BTW.

According to an HT article, Samsung, LG and Philips are also "renegotiating their deals" with FK. Here's the article -

Flipkart negotiating fresh deals with Samsung, LG​
(HT Correspondent, Hindustan Times New Delhi, October 08, 2014)
First Published: 23:30 IST(8/10/2014) | Last Updated: 23:38 IST(8/10/2014)

Flipkart, India’s largest e-commerce company, is renegotiating its deals with consumer durable majors such as Sony, Samsung, LG and Philips.


Some of these companies had threatened to stop supplying TVs, microwave ovens, air conditioners etc to Flipkart following the latter’s “Big Billion Day” sale on Monday, in which it sold these items at below-cost price, making it difficult for these companies to sell their products through their regular distributors.


HT has learnt these companies and some others have called a meeting with Flipkart promoters Sachin Bansal and Binny Bansal later this week.

“As the largest marketplace in India, we have thousands of sellers and brands selling their products on our platform. We value our relationship with every seller and brand and it is our continuous endeavour to facilitate an e-commerce platform that is beneficial to both them and our customers,” said Kalyan Krishnamurthy, senior vice-president, retail, Flipkart.


Top executives in major consumer goods companies, however, confirmed that an e-mail has been sent to Flipkart’s management, asking them to explain the pricing aspect and also renegotiate agreements.


“We have been regularly monitoring developments in both the online and offline retail space,” Samsung India spokesperson Rajiv Mishra said in an email response to HT. The LG India spokesperson refused to comment, but one of its top executives, Sanjeev Agarwal, vice-president, sales, was quoted in various media as saying, “We do not deal with them directly, and they are not our authorised trade partners.”


The Sony spokesperson did not comment at the time of going to press. But a top executive said, “We have written to them asking for an explanation on the pricing.”


 
Lord Nemesis said:
In those cases where the items are resold by unauthorized resellers, warranty is completely at the discretion of the manufacturer. Some outright deny warranty when they don't see a proof of purchase from an authorized source and others don't.
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I think its this "at the manufacturer's discretion" bit that is creating a lot of confusion in the market.

For example, you can go to NP and buy a Seagate drive from any of the 100's of shops there 99% of which are NOT "Authorized Seagate sellers".

Yet Seagate (usually) honors warranties on those products regardless. They don't ask you to go back to the vendor you bought the drive from and give all the potential invoices in the delivery chain so that they can confirm the "original" source was authorized. A quick serial check is all that's required. This is how it should work for most items.

IMO, it shouldn't matter WHO/WHERE I buy an item from -PROVIDED- the item was imported by the manufacturer (not discussing Grey Market Imports here) with import duties/taxes etc. legally paid for by the manufacturer. So whether I buy it from a Croma Store or WS Retail or a 3rd Party Seller on Amazon should be irrelevant.

In any case, I think its a little unfair to expect buyers to keep track of which online site/sellers are authorized and which are not. My post regarding Sony and FK above is a case in point. Once I have seen that FK (ie. WS Retail) is an authorized Sony seller, why would I go back and check this info repeatedly before each purchase?

Sites like Amazon, FK etc. explicitly state that products sold by them are "100% Genuine" (even though this may not be 100% accurate when it comes to all 3rd party sellers).

The above statement and the "goodwill/respect/comfort level" people tend to have for these sites seems to affect buyers "psychologically" in the sense that they extend this "100% Genuine" to mean that items purchased from these sites will also carry the same warranties that B&M stores provide for similar products. Many sites mention "Item carries 'X' years Manufacturers Warranty" for products they offer which further reinforces this belief...
 
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Lord Nemesis said:
That is only when its sold through resellers authorized by the company.
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I don't think so, I have bought Nokia mobiles many times from non-authorized shops. In tier-3, tier-4 cities there are no such shops at all and still warranty is honored. This applies to mobiles, computer parts, washing machine etc. Sometimes I buy computer spare parts from CTC, Hyd, half of the shops are unauthorized and still my warranty was honoured.

I have bought iPhones from non-authorized Apple resellers and still my warranty was honored.
 
avi said:
I don't think so, I have bought Nokia mobiles many times from non-authorized shops. In tier-3, tier-4 cities there are no such shops at all and still warranty is honored. This applies to mobiles, computer parts, washing machine etc. Sometimes I buy computer spare parts from CTC, Hyd, half of the shops are unauthorized and still my warranty was honoured.

I have bought iPhones from non-authorized Apple resellers and still my warranty was honored.
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You are missing the part "At the discretion of the company". A company can choose to honor warranty even when you purchase from a non-authorized source. However it is their choice. When you buy from a authorized source, they have to honor warranty as per their terms. When you buy from an unauthorized source, they can still choose to honor or void your warranty.

Also FYI, in many instances, for the items sold @ CTC, the start date for warranty purpose is not the day you purchased the item, but the day that the seller had purchased the item from his source. Apart from that, in some cases, you only get dealer warranty. You have to take the item to the dealer to get replacement. It all varies from case to case.
 
Lord Nemesis said:
You are missing the part "At the discretion of the company". A company can choose to honor warranty even when you purchase from a non-authorized source. However it is their choice. When you buy from a authorized source, they have to honor warranty as per their terms. When you buy from an unauthorized source, they can still choose to honor or void your warranty.

Also FYI, in many instances, for the items sold @ CTC, the start date for warranty purpose is not the day you purchased the item, but the day that the seller had purchased the item from his source. Apart from that, in some cases, you only get dealer warranty. You have to take the item to the dealer to get replacement. It all varies from case to case.
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This Phrase "At the discretion of the company" will become a headache for all the brands if the consumers take them to court.
 
^^Absolutely nothing's going to happen even if the consumers take them to court in such cases. There are a sh1t load of cases where people tried and failed. There is a reason why the system of authorized channels exist. No body gives you an unlimited and unconditional warranty. Every warranty is limited and subject to conditions set by the manufacturer. The manufacturer is essentially promising that as long as you buy a genuine product from a channel trusted and authorized by them for sales, they can guarantee you the quality of that product and if it fails the set expectations, they will provide you with satisfactory service towards repair or replacement of the item either directly or through the channels authorized by them.

None of that applies the moment you go out and buy a product from an unauthorized source. An unauthorized source may be selling you a fake, tampered or altered product for all we know. I know of cases where resellers took out accessories or even swiped out the genuine components used in the product for cheaper ones before the product is sold. So there is no way a a manufacturer can promise you warranty in such uncontrolled conditions. Any understanding of quality and warranty/guarantee in such cases is between you and the source from whom the purchase was made.

You may have some luck suing your seller in such scenarios, but you would have no luck suing a manufacturer over a product brought though a source not authorized by them for resale.
 
I dont understand why this needs to be so convoluted. Give people the freedom - buy online or offline. I dont have the time to buy at shops, so I buy online. Simple.

avi said:
I don't think so, I have bought Nokia mobiles many times from non-authorized shops. In tier-3, tier-4 cities there are no such shops at all and still warranty is honored. This applies to mobiles, computer parts, washing machine etc. Sometimes I buy computer spare parts from CTC, Hyd, half of the shops are unauthorized and still my warranty was honoured.

I have bought iPhones from non-authorized Apple resellers and still my warranty was honored.
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Not really. I faced a hard time fixing a Nokia I got from a shop - was my first mobile purchase with my hard earned cash. Had gone through the RMA process 3 times to no avail. Finally, the RMA centre said - we will need a VAT bill to get you a new piece.

Nokia still sucks. Big time. And got screwed :p[DOUBLEPOST=1412965610][/DOUBLEPOST]
Sobirvs said:
https://twitter.com/amitbhawani/status/520545497434431488

wonder what's his source.
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I dont know why Dell needs to act like jerks, but if they dont give me corporate discounts [Which they have not got back to me yet!], and not allowing me to buy online [since apparently no warranty applies], then I am not buying them anymore - will shift to someone else.
 
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